VA puts away the carrot, pulls out the stick with Oracle Cerner on the VA EHR modernization. Last Friday’s report in the Wall Street Journal (paywalled) confirms that the Department of Veterans Affairs (VA) is actively renegotiating its contract with Oracle at what is now the five-year mark. Until an agreement is reached, VA is pausing the rollout, which according to previous reports has been largely paused anyway due to multiple critical problems in the slow rollout to date. The WSJ report is cited in Becker’s.
Reports in March during Senate VA committee hearings indicated that the $16 billion contract was due for renegotiation anyway by 17 May. Typically, VA vendor contracts are for five years and the original contract was signed in 2017 with Cerner. VA’s contracting officer, Michael Parrish, testified in those Senate hearings that he will push for a more favorable contract [TTA 18 March].
The Oracle Cerner Millenium EHR was to replace the crusty, still working but not interoperable VistA EHR. The Department of Defense had already contracted with Cerner and Leidos to develop an EHR for the Military Health System (MHS), Genesis, replacing AHLTA. That has largely been completed in a smaller system, though not without its glitches. Billions had been spent in multiple multi-year efforts to make the two existing systems interoperable, for instance to cover records of service members transitioning from active service to reserve or veteran status and for military retirees.
Oracle closed its $28.4 billion acquisition of Cerner last June to much fanfare, but has not had a pleasant moment with the VA or Congress since. During 2021-22, failures of the Oracle Cerner system included hundreds of outages, the ‘unknown queue’ creating at least 150 instances of harm (including one averted suicide) at one VA health system (Mann-Grandstaff), four veteran deaths, training program troubles, more in a GAO Inspector General audit, and the VA’s EHRM Sprint Team itself identifying 14 main and multiple sub-issues in safety and medical research integration in the EHR Modernization Sprint Report (PDF) released on 10 March delving deeply into the initial implementations.
In 2023, there have been three Senate and three House bills proposed with mandates ranging from ‘hold rollout till issues fixed’ to ‘pull the plug and start over’. The VA had two resignations tied to the EHRM failures, VA deputy secretary Donald Remy and EHRM director Terry Adirim, MD. Implementations were delayed at Michigan’s Ann Arbor (including medical research, TTA 1 Mar) and Saginaw (this month) systems to later this year or even 2024. None of this has been cheap. The Senate VA Committee hearings in March revealed that the VA has paid Oracle Cerner $4.4 billion on the contract so far, with a refund of $325,000 paid as compensation for ‘incomplete technology and poor training’. Obligations through the contract are at least $9.4 billion. The new system has been implemented to date in five VA medical centers out of 171. [TTA 18 Mar]
Updated. Another five-hour outage of both VA and DOD-MHS systems occurred on Monday 17 April. Affected systems included PowerChart, RevCycle, and other applications with latency issues and freezing. This may have been a result of transitioning to a larger database over the weekend. Today (Wednesday 19 April), the House Veterans’ Affairs Subcommittee on Oversight and Investigations will hold hearings on the proposals contained in the two House bills. FedScoop
If Oracle really wants to transform healthcare, it can start with the VA as Job #1. Or give the keys to Epic. The VA is between the proverbial rock and a hard place. VA has to end VistA even though the old system is still being upgraded during the transition. Terminating the deal with Oracle and reverting five health systems would be perilous, if even possible. But the stakes for Oracle are even higher. Let’s start with billions in Federal contracts in other parts of government systems outside of healthcare. To get into healthcare EHRs, Oracle bought a Pandora’s Box with Cerner. The stakes are not only for our veterans but also to salvage its credibility in healthcare versus Epic–and with its lenders who financed the heavily leveraged Cerner acquisition plus $90 billion in debt load [TTA 10 Nov 22].